Noel
Campbell 		My article last week on the SPI200 has aroused the attention of some of the more dedicated Elliott Wave traders. This week I’ll carry out a further review of the analysis given last week, to help keep those in both the Gann and Elliott camps happy. Just for the record I do not claim to be an Elliott Wave exponent. Gann, that’s a different story.

In strict Elliot Theory, Wave 1 upwards is the shortest, Wave 3 is up to 150% of Wave 1 with Wave 5 being less powerful than Wave 3. The Wave that the SPI is now displaying is longer than the typical Wave 3. In terms of Gann analysis I see this implying that a fourth upward leg maybe in order. Gann did say that markets can sometimes make a fourth leg (upward) and to watch for a Double Top. In Chart 1 I have taken on board the comments from the Elliott Wave camp and taken another perspective on the current market action. The popular response from the Elliott camp is to see the run from 2910 to the recent highs as an extended Wave 3. Chart 1, the revised viewpoint, we have the Gann count in blue and the Elliott count in red.

Chart 1


click chart for more detail

This potential fourth upward leg according to Gann may satisfy both camps, by also classifying this as Wave 5 in Elliott theory. I did make a comment that time will come into the equation when looking for the top of this current run. As it stands the 9 September high (September contract 3247 and December contract 3252) is the top of the run up. This date is 360 degrees + 180 degrees from the 7 March 2002 top and therefore is a pressure date on the Gann Emblem. The next price target I mentioned that I would be watching was in the low 3250’s to high 3240’s. The market has made the largest one-day swing to date from the 3006 low and things are now looking very interesting. The fullness of time is guaranteed to reveal all.

Until next week......

Noel Campbell